Norah works as a content writer for an online magazine. Because her work is not evaluated daily, she often spends her time playing online games, which adversely affects the quality of her work
a) What is the term used to refer to such behavior? b) What is the solution to this problem? Explain your answer.
a) The term used to refer to Norah's behavior is moral hazard. Moral hazard refers to actions that individuals take based on their own private information that is unavailable to the other party in the transaction but adversely affects their payoff. In this case, only Norah knows how much attention she pays to her work. This information is unavailable to her boss.
b) The management can motivate workers like Norah to work harder by offering efficiency wages. Efficiency wages are wages above the lowest pay that workers would accept and that employers use to increase workers' motivation and productivity.
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X is exports, M is imports, T is net taxes, G is government expenditure, C is consumption expenditure, S is saving, and I is investment. Which of the following equations represents the private sector balance?
A) X - M B) T - G C) S - I D) C + S + T
The Neoclassical Heckscher-Ohlin model assumes that all producers of any industrial product has knowledge of, and may avail itself of the same production technology available to producers in any other country
Many have flagged this identical technology assumption as unrealistic. During the past half century, the relative importance of Multinational Corporations (MNCs) in world trade has steadily increased. How would this trend affect the realism of the "identical technology" assumption?